Compliance teams face a widening gap between traditional insider trading controls and the realities of digital markets, according to the final instalment of a four-part series on employee compliance from StarCompliance (Star).
The series argues that while financial markets have transformed rapidly, the core principles underpinning insider trading law have not. Material non-public information (MNPI) remains just as sensitive regardless of whether it is used to trade a traditional security, a digital asset, a tokenised instrument, or a prediction market contract.
StarCompliance recently discussed the importance of rethinking insider trading compliance for digital markets.
What has changed, the piece states, is the sheer number of ways employees can now monetise confidential information, spanning brokerage accounts, exchanges, digital wallets, and platforms operating continuously across jurisdictions.
A central theme is the need to expand the definition of employee trading beyond legacy brokerage-account frameworks to capture exposure gained through digital assets, tokenised real-world assets, and prediction markets. Rather than treating every new instrument identically, the article recommends firms build flexible frameworks capable of assessing emerging asset classes as they develop.
The piece also urges compliance teams to look beyond traditional restricted lists, highlighting risks such as shadow trading, where an employee profits from trading an economically related company rather than the one they hold information on. It notes that digital assets and tokenised instruments often carry economic relationships that do not map neatly onto conventional issuer classifications, while prediction markets allow employees to act on confidential information without ever trading the underlying company’s security.
Visibility is flagged as another growing challenge, with employee activity increasingly dispersed across decentralised platforms and blockchain wallets that fall outside traditional monitoring tools.
The overarching message is that compliance infrastructure should be built for adaptability rather than designed around any single technology, since firms cannot predict which asset class, platform, or trading model will emerge next. As the article puts it, new markets do not eliminate old risks, they create new ways for those risks to surface.
Read the full StarCompliance post here.
Copyright © 2026 RegTech Analyst
Copyright © 2026 RegTech Analyst
